November 6, 2019
The life sciences sector continues to advance on national and global level, with notable growth achieved in key markets such as San Francisco, Boston and San Diego. A new report from JLL, shows the San Diego life science cluster experienced 13% year-over-year increase in rental rates. The average asking rental rate for Class A space is now at $4.44 NNN psf/month and Class B space is hovering at $3.95 NNN psf/month.
Leasing activity was highlighted by smaller firms with space needs under 17,000 square feet, with these smaller requirements accounting for 75% of the total number of signed leases. The San Diego cluster produced a total of 20 completed lease transactions during the third quarter. This deal volume was 20% higher than the quarterly average over the previous three years.
The strong activity from smaller tenants was a driving factor in the third quarter, producing only 202,008 square feet of total gross leasing – a 38% decrease from the prior quarter and 31% less than the third quarter of 2018.
One factor limiting growth in the sector is labor. Access to talent is proving more challenging in the leading life science markets, as companies are growing at a faster pace than the amount of available scientific talent.
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